Air India board reviews cost-cutting steps amid rising losses and West Asia tensions

Air India board has reportedly discussed cost-cutting measures, including furloughs and bonus deferments, amid rising losses and operational pressures linked to West Asia tensions and higher fuel prices. The airline is also reviewing leadership transition and long-term financial restructuring plans.

New Delhi: The Tata Group-backed Air India board has discussed a range of cost-cutting measures, including possible furloughs and deferment of performance-linked bonuses, as the airline grapples with mounting losses and rising operating pressures amid the ongoing West Asia conflict, as per multiple reports.

The meeting that was held at the airline’s headquarters in Gurugram, lasted for more than three hours and focused on the carrier’s financial position, cost rationalisation initiatives and broader operational challenges.

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The airline is evaluating multiple austerity measures to contain expenses as higher jet fuel prices and airspace restrictions linked to geopolitical tensions in West Asia continue to impact operations.

Among the options discussed were temporary unpaid leave for employees and delaying bonus payouts, which form part of employees’ cost-to-company structure.

The airline has been experiencing a sharp increase in operating expenses in recent months due to longer flying routes and elevated fuel costs arising from the regional conflict.

The board also reviewed the airline’s financial performance for 2025-26 and deliberated on leadership transition plans, including the selection of a new Chief Executive Officer.

Air India CEO and Managing Director Campbell Wilson is set to step down later this year and is scheduled to address employees at a townhall meeting on Friday.

Moreover, Air India Group is estimated to have posted losses exceeding Rs 22,000 crore in the financial year ended March 2026.

In April, Air India Express announced the restoration of flight operations to Qatar and Bahrain, while also expanding its network across key Gulf destinations, including the UAE, Oman and Saudi Arabia, effective April 30, 2026.

The ongoing geopolitical tensions in West Asia have also weighed on the broader aviation sector, disrupting flight schedules and increasing operational costs for airlines globally.

Media reports said Dubai International Airport witnessed a sharp decline in passenger traffic in March, with volumes falling significantly amid disruptions linked to the regional conflict.